It’s official, Verizon has reached an agreement with Vodafone to buyout its 45% stake in Verizon Wireless for $130 billion. The news comes after several months of rumors and speculation, and a report from The Wall Street Journal this weekend.
The deal, which is expected to close by the beginning of next year, is significant for a few reasons. For one, it will put Verizon in full control of the largest wireless carrier in the US. And two, it will rank as one of the largest acquisitions in history…
From Verizon’s press release:
“Verizon Communications Inc. (NYSE, Nasdaq: VZ) today announced that it has entered into a definitive agreement with Vodafone Group Plc (London, Nasdaq: VOD) to acquire Vodafone’s U.S. group with the principal asset of 45 percent of Verizon Wireless for $130 billion, consisting primarily of cash and stock. Verizon expects the transaction at close to be immediately accretive to the company’s EPS (earnings per share) by approximately 10 percent, without any one-time adjustments.
The transaction was unanimously approved by the boards of directors of Verizon and Vodafone, and is subject to customary closing conditions, including regulatory approvals and the approval of both companies’ shareholders. The transaction is expected to close in the first quarter of 2014.”
As aforementioned, the $130 billion transaction will consist of a combination of cash, Verizon common stock and other items. The company says that $58.9 billion will be paid in cash, and it has partnered with Chase Bank and other firms to facilitate.
Both Lowell McAdam, Verizon CEO, and Vittorio Colao, Vodafone Group CEO, made statements today regarding the deal, saying that it will “enhance value across platforms” and will allow both sides to “execute on their long-term strategic objectives.”
With over 110 million subscribers, Verizon Wireless is the largest wireless carrier in the US , and ranks number 16 in the world. It also has the largest LTE network in the country, with the 4G technology covering most of its footprint in over 500 markets.